From Movement to Improvement: Locomotive Data in "Retail In-Store" Strategy

From Movement to Improvement: Locomotive Data in "Retail In-Store" Strategy

Overview

Retail In-Store includes the strategies, technologies and processes used within physical retail locations to enhance the customer experience, optimize operations, and increase sales.

As the retail industry evolves in the face of digital transformation, the concept of Retail In-Store is becoming increasingly sophisticated, leveraging advanced technologies like Artificial Intelligence (AI) and Machine Learning (ML) to gain competitive advantages in the Retail industry.

How "Retail In-Store" modernizing the Retail Industry through AI/ML & IOT

  • Customer visibility, personalization, recommendation & overall Customer experience: AI and ML helps to analyze customer behavior, preferences, and purchase history to create personalized in-store experiences, also monitor competitors’ pricing strategies in real-time, allowing retailers to adjust their prices dynamically to stay competitive. This ensures that retailers can offer the best prices without compromising margins. ML algorithms analyze customer reviews, social media interactions, and feedback to gauge customer sentiment towards products and brands. This information is used to improve product offerings, marketing strategies, and customer service
  • Data driven Smart & effective Replenishment , Interactive displays, smart shelves, autonomous Store Operations, inventory management & operational efficiency: AI and AR continue to create immersive in-store experience, Autonomous robots handle replenishment tasks, Planogram optimization & shelf monitoring. AI help to drive the development of cash-less stores and auto payment, reduction in billing counter wait times.AI and ML models analyze the historical sales data, market trends, external factors like weather, holidays to forecast demand and sales, reducing the risk of overstocking or stockouts also effective utilization of store space.
  • Omni-Channel Integration: Retail In-Store strategies integrate physical and digital channels, providing a seamless shopping experience. Customers can check product availability online and pick it up in-store or receive personalized offers based on their online shopping history when they visit the store.
  • Promotion, Pricing strategies, Competitor Analysis & Market Advantage: AI and ML enable dynamic pricing strategy on actors such as demand, competition, and inventory levels. This allows retailers to maximize profits while remaining competitive in the market. By analyzing customer purchase data retailers can target the promotions that resonates the specific customer segment. AI powered Trend Analysis tool retailers stay ahead of market trends by identifying emerging customer preferences and behaviors. This allows retailers to adapt quickly to changing market conditions and maintain a competitive edge.
  • Combining locomotive Data , Customer Purchase behavior & Sales Data: Retailers can plan in-store events, product demos, product launch in areas identified through locomotive data, heatmap, traffic flow analysis. By understanding where customers naturally congregate, these events can be strategically placed to maximize engagement and exposure to the new product also by combining insights from purchase behavior with locomotive data, retailers can create effective cross-promotion strategies and do the strategic product launch and placement.



Modernized Retail In-Store

Technologies & Sample workflow :

  • ETL, Azure Data lake, AWS S3, Big Data integration Platforms, Spark, Apache kafka, Nifi, Flink, Google Analytics, Azure Clarity, Adobe analytics - Data store, transform, integration model, publish and to analyze customer data for trend identification, customer segmentation, predictive analytics, personalized marketing, dynamic pricing and inventory management decisions.
  • RestAPIs, ESB(Enterprise Service Bus) and middleware platform - To enable the communication between different systems such as POS, CRM, Inventory management and customer engagement platforms.
  • Mobile / Web app ( React, Angular, node, flutter) - Web and mobile development and integration with backend systems through APIs.
  • AI/ML algorithms , Computer Vision, AR,IOT, BLE ( Bluetooth Low Energy) beacons & Wi-fi triangulation - Personalized promotions, recommendations, navigation assistance through mobile devices, store temperature control, optimize shopping experience,
  • Encryption, Access control, SIEM ( Security information and event management), Network security platforms - To ensure the customer data, compliance regulations, IOT device protections and network security protocols.

Sample code snippet:

1.Analyzing customer movement patterns based on locomotive data to identify high-traffic areas in the store

Data : customer movement like entry/exit and the store sections

Dwell time : Amount of time customer spend in the store.

Section Visits : The number of visits by customer into a specific section

import pandas as pd
import matplotlib.pyplot as plt

# Sample data: Customer movements within the store
data = {
    'CustomerID': [1, 2, 3, 4, 5],
    'EntryTime': ['10:00', '10:05', '10:10', '10:20', '10:30'],
    'ExitTime': ['10:20', '10:25', '10:30', '10:40', '10:50'],
    'SectionsVisited': [['A', 'B', 'C'], ['B', 'C'], ['A', 'C'], ['B', 'D'], ['A', 'B', 'D']]
}

# Load data into a DataFrame
df = pd.DataFrame(data)

# Calculate dwell time in minutes
df['DwellTime'] = pd.to_datetime(df['ExitTime'], format='%H:%M') - pd.to_datetime(df['EntryTime'], format='%H:%M')
df['DwellTime'] = df['DwellTime'].dt.total_seconds() / 60

# Count visits per section
section_visits = pd.Series(sum(df['SectionsVisited'], []))
section_visit_counts = section_visits.value_counts()

# Plotting the most visited sections
plt.figure(figsize=(10, 5))
section_visit_counts.plot(kind='bar', color='skyblue')
plt.title('Most Visited Sections in the Store')
plt.xlabel('Store Sections')
plt.ylabel('Number of Visits')
plt.show()        

2. A Simulation of an IOT enabled inventory management system tracks stock levels in real time and trigger automatic replenishment.

Inventory : Inventory level of the products

Replenishment : if the stock levels of any product at any time falls below a specific threshold, the system triggers for refill.

Real-time Update : Stimulate the real time inventory update reflecting sales and replenishment.

import random

# Sample product inventory
inventory = {
    'ProductA': 50,
    'ProductB': 30,
    'ProductC': 20
}

# Replenishment threshold
threshold = 10

# Function to simulate real-time inventory updates
def update_inventory():
    for product, stock in inventory.items():
        # Randomly decrease stock to simulate sales
        inventory[product] -= random.randint(0, 5)

        # Check if replenishment is needed
        if inventory[product] < threshold:
            trigger_replenishment(product)

# Function to trigger replenishment
def trigger_replenishment(product):
    print(f"Replenishment triggered for {product}. Current stock: {inventory[product]}")
    inventory[product] += 50  # Simulate replenishment

# Simulate inventory updates over time
for _ in range(10):  # Simulate 10 time intervals
    update_inventory()
    print(f"Current inventory: {inventory}")        

3. Collaborative filtering to provide personalized product recommendations based on customer purchase behavior

Purchase Data : The data presents whether the customer has purchased the product

Similarity Calculation ( ML Algo) : Cosine similarity is used to calculate the similarity between the customer and their purchase behavior

Product Recommendations : Based on similar customer's purchase, the function recommends similar type of products that a specific customer interested in.

import pandas as pd
from sklearn.metrics.pairwise import cosine_similarity

# Sample purchase data: Rows are customers, columns are products (1 = purchased, 0 = not purchased)
data = {
    'ProductA': [1, 0, 0, 1, 0],
    'ProductB': [0, 1, 0, 1, 1],
    'ProductC': [0, 0, 1, 0, 1],
    'ProductD': [1, 1, 0, 0, 0]
}

# Load data into a DataFrame
df = pd.DataFrame(data, index=['Customer1', 'Customer2', 'Customer3', 'Customer4', 'Customer5'])

# Compute cosine similarity between customers
similarity_matrix = cosine_similarity(df)

# Convert similarity matrix to a DataFrame
similarity_df = pd.DataFrame(similarity_matrix, index=df.index, columns=df.index)

# Function to get product recommendations for a customer
def get_recommendations(customer, df, similarity_df):
    similar_customers = similarity_df[customer].sort_values(ascending=False).index[1:]
    recommended_products = set()

    for similar_customer in similar_customers:
        purchased_products = df.loc[similar_customer][df.loc[similar_customer] == 1].index
        recommended_products.update(purchased_products)

    # Exclude products the customer has already purchased
    already_purchased = set(df.loc[customer][df.loc[customer] == 1].index)
    recommended_products.difference_update(already_purchased)
    
    return list(recommended_products)

# Get recommendations for a specific customer
customer_recommendations = get_recommendations('Customer1', df, similarity_df)
print(f"Recommended products for Customer1: {customer_recommendations}")        

Benefits of the Retail In-Store

  • Enhanced Customer Experience: Personalization and real-time engagement tools create a more satisfying shopping experience, increasing customer loyalty and sales.
  • Operational Efficiency: Automated inventory management and AI-driven analytics reduce manual processes, improve accuracy, and optimize resource allocation.
  • Data-Driven Decisions: The integration of real-time data analytics enables retailers to make informed decisions quickly, enhancing their ability to respond to market trends and customer needs.


Please share your experience on modernizing the Retail Instore strategies.





Binay Ojha

Senior Project Manager at Mindtree

2 个月

Very informative and detailed explanation, problem and it's solutions

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